Daily Flows
- NAB’s 3-year floating rate note priced yesterday at +78bps over 3-month BBSW — the first primary issuance from a major bank since April’s volatility, met with solid demand.
- For term deposits, an A-rated name is offering 4.75% for 5-years, appealing to yield-seeking investors with a longer horizon.
- Today RACQ (P-2/Baa1) has come to market, launching 3 year floating rate MTN at an initial guidance of +140.
The Fed Holds as Markets Expected
- The US FOMC left the Fed funds rate unchanged at 4.25–4.50% this morning, in line with market consensus. Members acknowledged rising risks to both inflation and unemployment but signalled a cautious, data-dependent stance. OIS pricing now reflects 21bps of cuts by July and 79bps by year-end.
- There wasn’t much of a reaction in the bond market, with the U.S. 10-year dropping by 5 basis points.
- The Fed’s decision and tone are unlikely to shift the RBA’s near-term stance, but softer global yields could provide mild support for AUD fixed income markets.
- It is a light domestic data calendar today, though attention will turn to the Bank of England meeting tonight, where a rate cut is widely expected.
